Complete Text of Report is available in PDF format (677 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.
EXECUTIVE SUMMARY:
Our objective was to determine whether the Title IV-E administrative and training costs claimed by the Department of Services were allowable, allocable, and reasonable in accordance with applicable Federal regulations and guidelines. We found that the Department of Services used a revised allocation method that allocated all case management costs for candidates to Title IV-E, without considering the percentage actually placed in Title IV-E foster care. In addition, the Department of Services used incorrect salaries in flawed cost allocation schedules and claimed indirect costs at an enhanced funding rate. The Department of Services took actions during our audit to correct the conditions that we identified.
We recommended that the Department of Services: (1) work with ACF officials to resolve the increase of $5,859,542 (Federal share) in Title IV-E administrative claims that resulted from using an inequitable methodology to allocate candidates’ case management costs, (2) amend its cost allocation plan to reflect the appropriate methodology for allocating administrative costs for foster care candidates, (3) continue to include only current-quarter salaries for the Client Payments Unit, the Training Unit, and Foster Home Coordinators in calculating administrative claims, (4) use actual salaries to recalculate the administrative claims for the quarters ended December 1999 through June 2001 and make the appropriate adjustments, and (5) refund to the Federal Government $53,191 in improperly claimed indirect costs and discontinue the practice of claiming indirect costs at the enhanced 75-percent Federal funding rate.